Analysis conducted on 28 hotels across Macau suggests that both Average Daily Rates (ADR) and occupancy rates are anticipated to be notably lower during the upcoming Labor Day holidays when compared to the 2024 Chinese New Year (CNY) holiday and the May Golden Week in 2019.
According to Morgan Stanley analysts, despite the May Golden Week encompassing five official public holidays, its duration pales in comparison to the extended CNY holiday observed earlier in 2024, which spanned eight days.
This year’s May Golden Week matches the length of the 2019 edition, with only one official holiday. The condensed holiday period, compounded by adjusted working days in April and May alongside weekend days, effectively reduces the holiday experience to just a single day. Such circumstances have significant implications.
Morgan Stanley predicted a downturn in GGR during the May Golden Week, anticipated to be weaker than that recorded during the CNY holiday.
‘Already, April’s GGR has faced pressure from adverse weather conditions, tracking at MOP600 million ($74.7 million) per day or MOP18 billion ($2.2 billion) for the month. This represents 76 percent of April 2019 figures, marking an 8 percent month-on-month decline. This downward trend is expected to persist throughout May,’ the brokerage pointed out.
Meanwhile, across the board, ADR and occupancy rates are expected to register significant declines, with a comparison with data from the 2024 CNY and the 2019 May Golden Week indicates a stark difference.
‘ADR for most hotels is projected to be over 20 percent lower than during the aforementioned holiday periods. Furthermore, a substantial portion of surveyed hotels indicates weaker full booking days compared to both the 2024 CNY and the 2019 May Golden Week.
At the same time, MS pointed out some performance differences between the gaming and hotel operators, with MGM China ‘relatively resilient’, with its properties demonstrating growth in ADR and/or occupancy levels compared to both the 2024 CNY and the 2019 holiday period.
Conversely, Sands hotels, including Venetian, Four Seasons, Londoner and Parisian, show a more significant decline, potentially influenced by ongoing renovation efforts.
‘Similarly, Peninsula hotels, such as Mandarin Oriental, Wynn Macau, and Sands Macao, depict a notable decrease in ADR and occupancy rates compared to industry peers,’ the brokerage added.
